US Department of Justice criminal prosecutors and the UK's Financial Conduct Authority have teamed up to grill foreign exchange traders that are potentially involved with rigging currency rates.

A source tells IBTimes UK that the DoJ and FCA are now conducting joint interviews with London-based individuals at un-named banks, over allegations of rate rigging.

The FCA declined to comment.

In October 2013, the FCA confirmed it is probing the foreign currency market amid reports that a number of regulators are investigating allegations of market manipulation by some of the world's biggest banks.

One month later, the regulator said it is mulling over creating a new set of rules for the largely unregulated currency markets after the completion of a raft of foreign exchange manipulation investigations.

FCA Chief Executive Martin Wheatley pledged, at the time, to consider installing a new set of rules if the watchdog finds evidence of wrongdoing in relation to FX fixing allegations.

"If that evidence suggests a more fundamental problem, then you've always got a set of responses," said Wheatley.

"One response says you have to enforce against poor behaviour, and the other response is to look at the conditions that allowed that behaviour to exist. That is what we did with Libor and came up with a set of structural changes.

"Frankly it's an unregulated market and that would be a big policy change for global regulators to decide that FX needed to be a regulated market. The truth is we are at a very early stage and a long way off before we can make any conclusions."

In 2012, the UK watchdog had attempted to interview traders ahead of the DoJ, in regards to any potential market rigging allegations because of the difference in legalities surrounding different jurisdictions.

In the UK, the regulator can force individuals to answer questions, while in the US, people can plead the Fifth Amendment, under the country's constitution, to remain silent under oath in order to avoid self-incrimination.

So, if UK authorities gathered evidence under "compelled conditions," this would make it more difficult for US prosecutors to use in a case against individuals.

How Large is the World's FX Market?

The daily $5tn (£3.1tn, €3.7tn) currency market is the largest in the financial system and is pegged to the value of funds, derivatives and financial products.

Unlike stocks, futures or options, currency trading does not take place on a regulated exchange and is conducted in the over-the-counter derivatives market. All members trade with each other based on credit agreements and there is no arbitration panel to adjudicate disputes.